9911796707
TMI Blog1998 (2) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... price lists effective from 23-11-1990, 3-12-1990 and 1-2-1991 declaring the prices at which the Horlicks Biscuits were sold to M/s. H.M.M. Thereafter, the agreement between the appellant company and M/s. H.M.M. Ltd. was revised and a new amended agreement dated 1-3-1992 was entered into. As per the changed agreement, all the raw materials including the packing materials were to be supplied by M/s. H.M.M. The appellants were only to get the job charges from M/s. H.M.M. 1.2 In terms of the above agreement, the appellants filed price lists effective from 15-4-1992, 1-5-1992, 21-7-1992, 1-8-1992 and 27-1-1993, declaring the assessable value of the Horlicks brand biscuits, based on cost of raw materials supplied by M/s. H.M.M., plus the job ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods to be comparable in terms of Rule 6(b)(i) of the Central Excise (Valuation) Rules. He also submitted that while there can be no dispute about the legal position in respect of determining the assessable value in terms of Rule 6(b)(ii) i.e. the cost basis which is to be resorted to only after exhausting the possibility of determining the assessable value in terms of Rule 6(b)(i), the Commissioner has wrongly applied the said law. The same very goods manufactured by the appellants have been held to be comparable goods by the Commissioner (Appeals). He further submitted that for comparing the two goods and for holding them to be comparable, such goods must be different from the goods under assessment. The same very goods under assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Kandivali Metal Works (supra), that the goods manufactured by the job worker and returned to raw material supplier, have to be assessed at a value on the basis of cost of raw-materials, labour charges and profit, in terms of the Supreme Court s judgment in the case of Ujagar Prints case. It was also observed in the said judgment that Rule 6(b), whether the sub-rule (i) or (ii), will not apply in such type of a situation as the same is applicable only where the excisable goods are not sold by the assessee, but are used by the assessee or consumed by him or on his behalf in the production of manufacture of another article. He submitted that the appeal filed by the Department against the decision of the Tribunal in the above case was reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d , will be supplied exclusively by the said purchaser for manufacture of Horlicks Branded Biscuits ; (ii) the purchaser reserves the right to be the first purchaser of the goods in question; (iii) the dies and blocks used for stamping the trade mark, Horlicks on the biscuits are to be supplied by the purchaser; (iv) sale of Horlicks brand of biscuits to the purchaser shall be on the prices current and fixed by the purchaser; (v) to ensure the strict quality control of the product, the purchaser reserves the right to nominate any of its servant/agent to supervise and monitor the manufacturing operation at the company s factory; (vi) the said goods after being manufactured are required to be stock transferred to warehouse and/or depots ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The same very biscuits manufactured by the appellants cannot be compared with the same very biscuits. As such, there is no justification for adopting the value at which the goods are sold by M/s. H.M.M. by holding that the same are comparable. We also find that as observed by the Tribunal in the case of Kandivali Metal Works, the provisions of Rule 6(b) are not to be resorted to in the situation where the goods are manufactured by the job worker out of the raw materials supplied and is returned to the raw material supplier inasmuch as the said Rule is applicable only to the situation where the goods are not sold by an assessee, but are used or consumed by him or on his behalf captively, in the production and manufacture of another article. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Honourable Supreme Court in the case of Ujagar Prints referred to supra, has laid down the principle required to be adopted in arriving at the assessable value in the cases where the goods are manufactured on job work basis. The observation of the Commissioner (Appeals) that the case of Ujagar Prints is different from the present case in the sense that it was neither a point at issue nor was it decided as a matter of principle as to what would be the valuation of the goods by Supreme Court, particularly with reference to the provisions of Valuation Rules, as discussed above, when value of comparable goods is available, does not appeal to us. There is no doubt that the goods are being manufactured on job work basis. We have already h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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